why is Facebook rising? Corporations are pulling ads from Facebook. What gives?
Stock prices are merely speculation of what they think the company will be worth in the future. The initial announcement always causes investors and speculators to panic. This means in the future for you, you look to buy, especially when it is a solid stock with a track record. Remember, buy the dip.
But to answer your question, you have to dig deeper into what is happening and what will happen. First, Starbucks announced that it will be suspending all Facebook ads through the end of the year. Which means they will be back. Additionally, this pandemic has hurt every single food and retail business in the US. Starbucks has almost half of its customer base as a walk-up. A large draw to their business was the sit-down atmosphere. They are making it seem as though it is because of Facebook's policies, however, the truth is Starbucks just closed 400 brick and mortar storefronts. Additionally, the have come in much lower than forecasted accounting for the pandemic. It is always Assets minus liability = profit or value. The sold assets which lowered that profit. To balance this, they much decrease liabilities which includes the advertisement budget.
Secondly, which is the most important factor, none of the users have left, because there is nowhere is else to go. Facebook has somewhat of a monopoly on social media. Businesses know this and investors know this.
When bad news happens, there will always be a large group of emotional investors who will dump the stock. They are risk-averse.
